A federal court in Louisiana has held that an insurer that had advanced money to an insured before it decided whether a claim was not covered is entitled to be reimbursed on an unjust enrichment theory. Bridge Lake, LLC v. Seneca Insurance Co., 2014 WL 849893 (W.D. La. Mar. 4, 2014). 

The insured owned property on which an oil pipeline ruptured. Its insurer advanced funds for cleanup, but advised the insured that it did not concede coverage. The insurer later concluded that coverage was not owed due to a pollution exclusion in the policy and so advised the insured. The insured sued the insurer, which suit the court dismissed based on a finding of no coverage. In ruling on the insurer’s counterclaim for reimbursement of funds advanced, the court awarded summary judgment in the insurer’s favor, holding that it had a right to reimbursement of advanced funds if no coverage existed.